William Percy learned the hard way that they don’t always have their clients' backs.

Percy lives in Colorado, but he worked as a phone installer in California until the late '90s. Before he retired, he met with an adviser who he says gave him this pitch: “Hey, don’t take your pension and get $1,000 a month. Take this and you can get $2,400 a month.”

She sold him a variable annuity, which Percy thought he could live off for the rest of his life. But the market turned, the principal shrank and the fees piled up.

“It just wasn't as guaranteed as [she] said it was,” he explains, adding that he later found out the adviser was being paid each time she sold someone one of these products.

“To me, that was all she looked at... how many clients she could bring in,” he says.

“Financial services firms are able to portray themselves as trusted financial advisers,” says Barbara Roper, director of investor protection for the Consumer Federation of America. “They’re certainly relied upon as trusted financial advisers by investors, but many of them simply aren't subject to a requirement to act in the best interest of their investors.”

When it comes to retirement planning, Roper says the problem is a few key loopholes in the Employee Retirement Income Security Act (ERISA). One such loophole is that the people who give one-off advice don’t have to act in the client’s best interest.

Brokers just have to recommend products that are “suitable,” says Roper. “But they can recommend the worst of the suitable products, the one with the highest costs or the poorest performance if it happens to be the one that offers them the highest financial compensation.”

This can short change people of tens or even hundreds of thousands in retirement savings. ­­­

The Department of Labor is planning to propose an update to ERISA in January.

The Securities Industry and Financial Markets Association, a trade group, agrees that it would be helpful to create a uniform standard for investment advice, but is concerned that the Labor Department’s update might push firms to cut back on services to less well-off customers.

“The negative consequences are potentially so great in terms of not having access to someone to talk to, not having access to certain investment options,” says Lisa Bleier, SIFMA’s managing director and associate general counsel.

Instead, the group is advocating for the Securities and Exchange Commission to create a standard that applies more broadly, which the Department of Labor could then follow.

In the meantime, as Percy found out, access to financial advice can occasionally create more problems than it solves.

“I knew what [the adviser told] me,” he says. “But there is no way for the lay person to know everything. It’s like when you sign your automobile contract, do you know everything that’s in there?”